TAIPEI (Taiwan News) — Taiwan’s manufacturing sector returned to expansion in March, with gains across electronics and chemicals, the Taiwan Institute of Economic Research said Thursday.
The March manufacturing climate indicator rose 3.32 points to 14.20, shifting from a cooling blue-yellow light in February to a neutral green signal, per CNA. The institute said the improvement was driven by robust AI demand, inventory restocking, and front-loading of orders amid global uncertainty.
Manufacturing output and export-related indicators all posted strong gains, with production growth reaching a record high. The share of contraction signals fell sharply, while boom red light indicators surged to 21.42%, reflecting a broad-based recovery across sectors.
In electronics, computers, and optical products, demand for laptops, servers, and networking equipment continued to rise, supported by AI and cloud computing expansion, per UDN. This pushed the sector into boom territory, with robust growth in exports, orders, and production.
The chemicals sector also rebounded, helped by recovery in semiconductor-related demand and commercial real estate activity, as well as precautionary stocking linked to Middle East tensions. Export orders and output shifted from contraction to double-digit growth.
The institute said that, excluding seasonal distortions from the Lunar New Year, the March indicator remained above the recent average, signaling improvement in manufacturing conditions. It added that AI-related investment and semiconductor capital spending are likely to support momentum.
However, the institute cautioned that geopolitical risks, including Middle East tensions and energy price volatility, remain elevated. Rising oil, shipping, and insurance costs could add pressure to global supply chains and financial markets.
The institute said AI-driven growth is expected to remain a key support factor, with government measures helping cushion cost pressures. Still, it stressed that global developments will determine whether manufacturing strength can be sustained.
